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New Jersey Transit Corp. v. AMB Institutional Alliance Fund II

May 18, 2009


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5591-04.

Per curiam.


Argued December 16, 2008

Before Judges Parker, Yannotti and LeWinn.

In this condemnation action, plaintiff New Jersey Transit Corporation (NJT) appeals from an order entered on May 25, 2007 denying its motion for a new trial after a final judgment had been entered memorializing a jury award of $628,500 to defendant. We affirm.


The facts relevant to this appeal are as follows. NJT sought to acquire property for the Secaucus Transfer Project, which involved adding tracks to the existing northeast corridor line that runs from Boston to Washington, D.C., construction of the Secaucus Rail Station and a connection of the new rail line with an existing one. The additional tracks would have created a four-track grade crossing on New County Road, which would have posed a safety problem. To resolve the safety issue, NJT proposed to construct a bridge to elevate New County Road over the four tracks. The bridge was to be situated entirely on county property.

NJT specifically sought to condemn 1,047 square feet of property owned by defendant AMB Institutional Alliance Fund II (AMB) and take a utility easement and a temporary construction easement on the same property. NJT needed the corner of the property owned by AMB to improve the intersection of Castle Road and New County Road. Pursuant to the Eminent Domain Act, N.J.S.A. 20:3-1 to -50, NJT took possession of AMB's property and, during construction utilized the property as a temporary construction area, resulting in the temporary construction easement. The project was completed in July 2003.

On March 10, 2004, NJT offered AMB $88,550 for the property and easements. When the parties were unable to negotiate an "agreed-upon price," NJT filed a condemnation action on October 28, 2004. The complaint sought the appointment of commissioners to determine an appropriate amount of compensation. On December 17, 2004, the trial court entered judgment and appointed commissioners. The judgment provided that NJT "is authorized to exercise and has duly exercised its power of Eminent Domain to acquire the property" from AMB. The court appointed three commissioners to appraise the property and determine the fair compensation to be paid.

On March 20, 2006, the commissioners determined that $131,500 was fair compensation. AMB appealed and demanded a jury trial. Before trial, NJT moved in limine to bar one of AMB's experts from testifying with respect to lost profits, lost parking, lost vehicular access and the value of the property because the expert allegedly combined compensable and non-compensable damages in his calculations. The motion was denied on March 20, 2007 and the matter proceeded to trial. At trial, the following evidence was presented.

AMB owns 3.44 acres.*fn1 A 103,980 square foot building, divided into warehouse and office space, is located on the property. The property fronts on Castle Road to the east and New County Road to the south. There are nine loading docks facing Castle Road and four at the back of the property, which were previously used for rail loading. At the rear of the building, there is a concrete pad with a large garbage dumpster, extending from AMB's property to adjacent land owned by Command Enterprises (Command).

Prior to the construction and condemnation, AMB had unrestricted access from New County Road because there were no driveways or curb cuts. Consequently, vehicles could enter the property and drive to the rear of the building to access the dumpster. There was parking along the entire length of the New County Road side of the building.

AMB's expert, Michael J. Spillane, P.E., P.L.S., a licensed engineer, land surveyor and planner, testified that NJT built a parapet along the length of the new bridge and newly-elevated New County Road, which eliminated direct access to the property from New County Road. Consequently, access to the property was only available along Castle Road. Spillane testified that the distance between the building and the property line was only 9.1 feet, which could not accommodate a turning radius for large trucks, particularly for the garbage trucks trying to reach the dumpster. Spillane also testified that the loading docks in the rear of the property would not be accessible. Spillane further noted that safety vehicles, such as fire trucks and ambulances, would not be able to reach the rear of the building either.

Spillane testified that by losing access to the rear of the building, the structure became "functionally obsolete" because what you have now is a . . . building with access from one side and not even halfway access to the rear. There's not even the ability to just drive around the building to access the back of the building. You can't get to the back of this building without going on somebody else's property, whether it's the county road right of way or the neighbor's, you have to encroach on somebody's property to get to the back of your building.

Spillane confirmed that prior to construction, the property enjoyed unrestricted access from New County Road. He testified that AMB had twenty-one parking spaces fronting on New County Road prior to construction. Although NJT claimed that it could replace four of these spaces along the side of the building, Spillane indicated that the designated area for the spaces was insufficient and, at best, one parking space could be placed on the side of the building -- resulting in a loss of twenty spaces. He acknowledged that the 9.1 foot distance between the southwest corner of the building and the right-of-way had not changed, but he noted that the addition of the elevated roadway, bridge and parapet eliminated access to the rear of the building altogether, albeit access from Castle Road remained unchanged.

Charles Klatskin, a real estate broker and developer who specializes in industrial properties, testified on behalf of AMB that he showed AMB's property to potential clients during the three-month construction period. The biggest negative observed by prospective tenants was the lack of parking for the building. Klatskin asserted that NJT's temporary easement was "killing the building" and that NJT should have been obligated for the full rental value of the building during the construction period. Klatskin acknowledged that AMB had received a waiver for thirty-seven parking spaces on the property, rather than the sixty-six spaces required under the zoning ordinance, but the waiver predated the construction and was not relevant to the taking.

Richard M. Chaiken, M.A.I., C.R.E., a real estate appraiser and consultant, prepared a report on behalf of AMB estimating the market value of the property taken by NJT and damages to the remainder. Chaiken estimated that just compensation for the taking was $655,000, consisting of the following components: $155,000 for the temporary construction easement and $500,000 for the parcel subject to the fee taking by NJT. His estimate for the value of the temporary construction easement reflected the elimination of all parking spaces along Castle Road and at the corner of New County Road during the construction period. In Chaiken's opinion, the temporary easement "effectively destroyed the utility of the building. No one would rent the building and nobody would rent the space to anybody else."

Todd Robertson Edwards, Senior Program Manager for NJT, testified that the corner of the property was acquired in order to build a new intersection between the New County Road bridge and Castle Road. Pursuant to the construction easement, NJT built a detour road on the New County Road side of AMB's property to allow cars to continue to travel through the area while the bridge was under construction. Edwards acknowledged that construction of the bridge eliminated access to the property from New County Road and that NJT did not make the administrative application required for revocation of AMB's access to New County Road. He claimed, however, that the bridge was not built on AMB's property, nor did it alter the 9.1 foot distance between the building and the property line.

Thomas Martin, Project Manager for NJT, developed the plans and specifications, obtained bids from contractors and coordinated the construction activities for the project. He testified that AMB never complained about lack of parking on its property. He did, however, acknowledge that AMB had expressed its concern over the distance between the building and the proposed parapet. To address this concern, NJT constructed the parapet seventeen feet, ten inches from AMB's building, rather than on the property line. He further acknowledged that the right of entry agreement between NJT and AMB provided for "a suitable turning radius for a fifty foot long vehicle . . . to negotiate the turn around the southwesterly corner of the building from New County Road heading in a westerly direction making a right hand turn to the rear of the building." NJT never acquired the necessary property rights from AMB's neighbor, however, to permit construction of that "suitable turning radius."

Albert F. Chanese, M.A.I., an appraisal expert, prepared a report for NJT in which he used a sales comparison approach to value the corner of the property taken by NJT. Chanese estimated that the 1,047 square feet taken was valued at $8.72 a square foot, for a total value of $9,130. In his view, the utility easement was valued at $13,600 and the temporary construction easement at $10,625. NJT added $19,200 as rent of twelve parking spaces it took during the construction. In Chanese's opinion, the total value of the taking and the easements amounted to $66,155. In his opinion, there were no damages to the remainder of the property as a result of the taking.

The jury found that the value of the property taken in fee was $11,000; damage to the remainder as a consequence of the taking was $487,500; and the construction easement was valued at ...

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